UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549
                                -----------------

                                    FORM 10Q
                                -----------------
(Mark One)

[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
OF 1934


                 For the quarterly period ended March 31, 2011

 [   ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

            For the transition period from __________ to ___________

                       Commission file number: 333-151398

                           GULFSTAR ENERGY CORPORATION
                    -----------------------------------------
             (Exact name of registrant as specified in its charter)

         Colorado                                           02-0511381
         --------                                           ----------
 (State of Incorporation)                              (IRS Employer ID Number)

               600 17th Street, Suite 2800, Denver, Colorado 80202
                 -----------------------------------------------
                    (Address of principal executive offices)

                                  303-260-6492
                           --------------------------
                         (Registrant's Telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the past 12 months (or for such shorter  period that the registrant was required
to file such reports),  and (2) has been subject to the filing  requirements for
the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted  electronically  and
posted on its corporate Web site, if any, every  Interactive  Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter)  during the  preceding 12 months (or for such shorter  period that
the registrant was required to submit and post such files). Yes [ ] No [ ]

Indicate by check mark whether the  registrant is a large  accelerated  file, an
accelerated filer, a non-accelerated  filer, or a smaller reporting company. See
the definitions of "large accelerated  filer,"  "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated  filer [ ] (Do
not check if a smaller reporting company) Smaller reporting company [X]


<PAGE>




Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [ X]

Indicate  the number of share  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

As of May 12, 2011,  there were  17,574,088  shares of the  registrant's  common
stock issued and outstanding.






<PAGE>
<TABLE>
<CAPTION>
<S>     <C>




PART I - FINANCIAL INFORMATION                                                        Page

Item 1.  Condensed Consolidated Financial Statements

         Condensed Consolidated Balance Sheets (Unaudited) - March 31, 2011
                 and December 31, 2010                                                  1

         Condensed Consolidated Statements of Operations (Unaudited) -
                  Three months ended March 31, 2011 and 2010 and
                  From May 19, 2006 (Inception) to March 31, 2011                       2

         Condensed Consolidated  Statements  of Cash  Flows  (Unaudited)  - Three
                  months ended March 31, 2011 and 2010 and
                  From May 19, 2006 (Inception) to March 31, 2011                       3

         Notes to the Unaudited Condensed Consolidated Financial Statements             4

Item 2.  Management's Discussion and Analysis of Financial Condition
                  and Results of Operations                                             14

Item 3.  Quantitative and Qualitative Disclosures About Market Risk - Not Applicable    19

Item 4. Controls and Procedures                                                         20

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings -Not Applicable                                              21

Item 1A. Risk Factors - Not Applicable                                                  21

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds                    21

Item 3.  Defaults Upon Senior Securities                                                21

Item 4.  Removed and Reserved                                                           21

Item 5.  Other Information                                                              21

Item 6.  Exhibits                                                                       22


SIGNATURES                                                                              23


</TABLE>

<PAGE>




                                     PART I

ITEM 1. FINANCIAL STATEMENTS



<PAGE>
<TABLE>
<CAPTION>


                 GULFSTAR ENERGY CORPORATION AND SUBSIDIARIES
                     (A Company in the Development Stage)
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (Unaudited)
<S>                                                                             <C>                   <C>


                                                                                       March 31,           December 31,
                                                                                         2011                  2010
                                                                                   ------------------    -----------------
ASSETS

Cash and cash equivalents                                                       $            575,929  $            65,799
Accounts receivable                                                                           31,466               33,653
Prepaids and other assets                                                                     50,604               33,660
                                                                                   ------------------    -----------------
   Total current assets                                                                      657,999              133,112
                                                                                   ------------------    -----------------

Property, plant and equipment, net                                                         4,443,066            4,404,314

Goodwill                                                                                     368,369              368,369
Intangible assets                                                                            170,874              170,874
                                                                                   ------------------    -----------------
  Total other assets                                                                         539,243              539,243
                                                                                   ------------------    -----------------
   Total assets                                                                 $          5,640,308  $         5,076,669
                                                                                   ==================    =================
LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable                                                                $            832,373  $           936,418
Litigation settlement payment                                                                      -               15,000
Oil and gas proceeds due to others                                                            31,587               33,477
Notes payable, related party                                                                 370,289              335,078
Accrued liabilities                                                                          550,652              488,380
                                                                                   ------------------    -----------------
   Total current liabilities                                                               1,784,901            1,808,353
                                                                                   ------------------    -----------------
Commitments and Contingencies

STOCKHOLDERS' EQUITY

Preferred shares, no par value, 100,000,000 shares authorized;
    no shares issued and outstanding                                                               -                    -
Common shares, $0.001 par value, 200,000,000 shares authorized;
    17,574,088 and 16,985,086 shares issued and outstanding
    at March 31, 2011 and December 31, 2010, respectively                                     17,574               16,985
Additional paid in capital                                                                 7,294,073            6,296,863
Accumulated deficit                                                                       (4,750,132)          (4,332,703)
                                                                                   ------------------    -----------------
     Stockholders' equity before non-controlling interest                                  2,561,515            1,981,145

Non-controlling interest                                                                   1,293,892            1,287,171
                                                                                   ------------------    -----------------

   Total stockholders' equity                                                              3,855,407            3,268,316
                                                                                   ------------------    -----------------

   Total liabilities and stockholders' equity                                   $          5,640,308  $         5,076,669
                                                                                   ==================    =================

The accompanying notes are an integral part of these financial statements.


</TABLE>

                                       1
<PAGE>
<TABLE>
<CAPTION>

                  GULFSTAR ENERGY CORPORATION AND SUBSIDIARIES
                      (A Company in the Development Stage)
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
<S>                                                                     <C>                   <C>                  <C>


                                                                                                            Period from May 19, 2006
                                                                             Three Months Ended March 31,      (Inception) through
                                                                        ---------------------------------   ------------------------
                                                                              2011                  2010             March 31, 2011
                                                                        ------------------    -----------------    -----------------
Net revenues                                                            $       45,692        $       4,169        $        146,969
Cost of sales                                                                    8,431                    -                  45,273
                                                                        ------------------    -----------------    -----------------
Gross profit                                                                    37,261                4,169                 101,696
                                                                        ------------------    -----------------    -----------------
Operating expenses:
 General and administrative expenses                                           552,782              201,632               5,308,529
                                                                        ------------------    -----------------    -----------------
                      Total operating expenses                                 552,782              201,632               5,308,529
                                                                        ------------------    -----------------    -----------------
Loss from operations                                                          (515,521)            (197,463)             (5,206,833)
                                                                        ------------------    -----------------    -----------------
Other income (expense)
Other income                                                                        16              231,365                 248,623
Other expense                                                                     (931)                   -                (240,188)
                                                                        ------------------    -----------------    -----------------
                    Total other income (expense)                                  (915)             231,365                   8,435
                                                                        ------------------    -----------------    -----------------
(Loss) income before income taxes                                             (516,436)              33,902              (5,198,398)
Income taxes                                                                         -                    -                       -
                                                                        ------------------    -----------------    -----------------
Net (loss) income                                                             (516,436)              33,902              (5,198,398)
Less: net loss attributable to the
 non-controlling interest                                                       99,007                    -                 448,266
                                                                        ------------------    -----------------    -----------------
Net (loss) income attributable to
  Gulfstar common stockholders                                          $     (417,429)       $     33,902         $    (4,750,132)
                                                                        ==================    =================    =================
Basic and diluted net loss
 per common share                                                       $        (0.02)       $           -
                                                                        ==================    =================
Weighted average number of
 common shares outstanding                                                  17,361,836           11,659,659
                                                                        ==================    =================

The accompanying notes are an integral part of these financial statements.

</TABLE>

                                       2
<PAGE>
<TABLE>
<CAPTION>


                  GULFSTAR ENERGY CORPORATION AND SUBSIDIARIES
                      (A Company in the Development Stage)
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<S>                                                                      <C>                   <C>                   <C>

                                                                                                                      Period from
                                                                                                                     May 19, 2006
                                                                                  Three Months Ended March 31,        (Inception)
                                                                            -----------------------------------          through
                                                                               2011                  2010            March 31, 2011
                                                                          ------------------    -----------------    ---------------
OPERATING ACTIVITIES
Net (loss) income attributable to Gulfstar common stockholders           $   (417,429)         $     33,902           $  (4,750,132)
Adjustments to reconcile net (loss) income to net cash
 flows used for operating activities:
  Non-controlling interest                                                     (99,007)                   -                (448,266)
  Non-cash transfer of related party note receivable                                 -                    -                  82,325
  Non-cash issuance (correction) of equity for services                              -                    -                 331,565
  Depreciation                                                                  55,860                4,386                 239,409
  Changes in:
    Account receivable                                                           2,187                    -                 (31,466)
    Prepaids and other assets                                                  (16,944)                   -                 (50,604)
    Accounts payable and accrued liabilities                                   (58,662)            (207,528)              1,071,834
                                                                          ------------------    -----------------    ---------------
Net cash used for operating activities                                        (533,995)            (169,240)             (3,555,335)
                                                                          ------------------    -----------------    ---------------
INVESTING ACTIVITIES
Expenditures for property, plant and equipment (1)                             (19,612)            (458,787)             (4,607,475)
Acquisition of Talon Energy Corporation, cash acquired                               -                    -                  76,977
Expenditures for intangible assets                                                   -                    -                (170,874)
Issuance of related party note receivable                                            -                    -                 (82,325)
                                                                          ------------------    -----------------    ---------------
Net cash used in investing activities                                          (19,612)            (458,787)             (4,783,697)
                                                                          ------------------    -----------------    ---------------
FINANCING ACTIVITIES
Issuance of shares and member contributions (1)                              1,028,526              557,791               8,686,308
Redemption of shares                                                                 -              (19,000)               (141,636)
Proceeds from related party loan payable, net of repayments                     35,211                    -                 370,289
                                                                          ------------------    -----------------    ---------------
Net cash provided by financing activities                                    1,063,737              538,791               8,914,961
                                                                          ------------------    -----------------    ---------------
NET CHANGE IN CASH                                                             510,130              (89,236)                575,929

CASH, Beginning                                                                 65,799              705,622                       -
                                                                          ------------------    -----------------    ---------------
CASH, Ending                                                              $    575,929          $   616,386          $      575,929
                                                                          ==================    =================    ===============
</TABLE>

(1) During the 1st quarter of 2011,  Gulfstar LLC issued 50,000 shares of member
interests in exchange for property and  equipment of $75,000.  Accordingly,  the
cash flow statement excludes the impact of this transaction.

The accompanying notes are an integral part of these financial statements.

                                       3

<PAGE>



                  GULFSTAR ENERGY CORPORATION AND SUBSIDIARIES
                      (A Company in the Development Stage)
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE THREE MONTHS ENDED MARCH 31, 2011 and 2010
                                  (Unaudited)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations and Organization

Bedrock Energy,  Inc. was incorporated in Colorado on August 11, 2004 and on May
5, 2010 its name was changed to Gulfstar Energy  Corporation  ("Gulfstar" or the
"Company").

On May 5, 2010, the Company  entered into a Share Exchange  Agreement with Talon
Energy Corporation  ("Talon").  Talon is a Florida company engaged in management
activities in the oil and gas  industry.  On June 24, 2010,  the Share  Exchange
Agreement  with  Talon was  replaced  by a similar  Revised  and  Amended  Share
Acquisition  Agreement  between Talon and the Company and in conjunction  with a
June 24, 2010 Share Exchange  Agreement  between the Company and Gulfstar Energy
Group,  LLC ("Gulfstar  LLC"), a privately held  Mississippi  Limited  Liability
Company,  for 58.3% of the outstanding  equity interests of Gulfstar LLC, and an
Acquisition  Agreement  between  the  Company  and  Gulfstar  LLC to acquire the
remaining 41.7% of the outstanding equity interests of Gulfstar LLC. The Revised
and Amended Share Acquisition  Agreement and Share Exchange  Agreement were both
effective as of June 30, 2010.

The Share Exchange  Agreement  between the Company and Gulfstar LLC provided for
Jason Sharp and Timothy Sharp, officers and members of Gulfstar LLC, to exchange
their  58.3%  of  Gulfstar  LLC  outstanding  equity  interests  for  11,659,659
restricted shares of common stock of the Company.

The Gulfstar LLC exchange was  accounted  for as a reverse  recapitalization  in
which Gulfstar LLC was determined to be the acquirer for accounting purposes.

The June 24, 2010  Acquisition  Agreement  between the Company and  Gulfstar LLC
provides for the acquisition of the remaining  outstanding  equity  interests of
Gulfstar  LLC,  but  requires  a  Registration  Statement  to be filed  with the
Securities  and  Exchange  Commission  by September  30, 2011 to register  these
remaining shares of common stock offered by the Company to the individual equity
interest holders of Gulfstar LLC. This Registration Statement has until December
31, 2011 to become effective. As of March 31, 2011, these remaining 41.7% equity
interests of Gulfstar LLC have not been acquired by the Company.

The Revised and Amended Share Acquisition  Agreement with Talon provided for the
Company  to  issue  3,509,530  restricted  shares  of its  common  stock  to the
shareholders  of Talon in  exchange  for the  issued and  outstanding  shares of
Talon.  After the  exchange of such shares the Company  owned 100% of the issued
and outstanding shares of Talon.

Gulfstar LLC built and currently  operates a 16-mile natural gas pipeline supply
system in Western  Kentucky for the  transportation  of natural gas and provides
management  services for the operation of 20 wells in Kentucky of which it holds
overriding  royalty interest of  approximately  12.5%and holds mineral rights on
approximately  9,000  acres of leased  land.  The  pipeline  has become the main
operation of the Company while the Company  continues to manage the existing oil
and  gas   wells.   Geographically,   the   Company   is   focused  on  oil  and
non-conventional  shale gas in the Illinois Basin of Western  Kentucky while its
strategy is to concentrate  on lower risk profile  income  producing oil and gas
assets that have sizable  developmental  drilling  potential  with  multiple pay
zones.  The Company  intends to enhance its  Pipeline  development  efforts with
private  producers  of  constrained  and  shut-in  natural gas assets in Western
Kentucky. As such, the Company will provide producers in its area with a turnkey
solution to move existing production towards liquidity.

                                       4
<PAGE>




Interim Presentation

In the opinion of the  management  of the Company,  the  accompanying  unaudited
financial  statements  include all material  adjustments,  including  normal and
recurring  adjustments,  considered  necessary to present  fairly the  financial
position  and  operating  results of the Company for the period  presented.  The
financial  statements  and notes are presented as permitted by Form 10-Q, and do
not contain certain information  included in the Company's Annual Report on Form
10-K for the fiscal year ended  December 31, 2010. It is the  Company's  opinion
that when the interim  financial  statements  are read in  conjunction  with the
December  31,  2010 Annual  Report on Form 10-K and its  Current  Report on Form
10-Q,  the  disclosures  are  adequate  to make the  information  presented  not
misleading. Interim results are not indicative of results for a full year or any
future period.

Principles of Consolidation

Gulfstar  LLC  was  determined  to be the  accounting  acquirer  in the  reverse
recapitalization  that  occurred on June 30, 2010.  As a result,  all  financial
information  prior to June 30, 2010 will  include  only the accounts of Gulfstar
LLC.  Subsequent to June 30, 2010, the accompanying  financial  information will
include the accounts of Gulfstar,  its wholly owned  subsidiary,  Talon, and its
majority owned subsidiary,  Gulfstar LLC. All significant inter-company balances
and transactions have been eliminated during consolidation.

Development Stage

The Company, through its subsidiaries, is currently focusing on the operation of
its pipeline  system,  management of existing oil and gas wells and  exploration
and production activities.  Significant additional efforts, and funding, neither
of which is  assured,  are  required  for the  Company to achieve  its  intended
normalized  operating  level.  Substantially  all of the  Company's  efforts are
devoted to the  establishment  of  sufficient  resources  and revenue  producing
assets  in order to  achieve  its  overall  operational  goals.  Though  planned
principal  operations have commenced,  no significant  revenue has been realized
from the Company's to-date activities. The consolidated statements of operations
are shown  inclusive of all  cumulative  revenue and expense  activity since the
inception  date of the  Company,  May 19,  2006,  while  the  Company  is in the
development stage.

Non-Controlling Interest

The non-controlling  interest is related to Gulfstar LLC, which is consolidated,
but not wholly owned by the Company. At March 31, 2011, the Company owned 58% of
the equity interest of Gulfstar LLC and therefore,  the non-controlling interest
of 42% was  $1,293,892.  At December  31, 2010,  the Company  owned 58.4% of the
equity interest of Gulfstar LLC and therefore,  the non-controlling  interest of
41.6% was $1,287,171.

Income Taxes

Gulfstar  LLC,  a limited  liability  company,  is not a tax  paying  entity for
Federal  income  tax  purposes.  Its pro rata  share of  income,  losses and tax
credits is passed  through to its members  and  reported by its members on their
individual income tax returns. The consolidated  statement of operations for the
three  months  ended  March  31,  2010  and for the  period  from  May 19,  2006
(inception)  through  March 31, 2010  include the accounts of Gulfstar LLC only,
therefore,  no provision for federal income taxes or for deferred taxes has been
determined.  The Company  has  determined,  for the period June 1, 2010  through
December 31, 2010 and for the period January 1, 2011 through March 31, 2011, any
provision  for income taxes or deferred  taxes and this  determination  has been
based upon the accounts of Gulfstar Energy  Corporation,  Talon and the pro rata
loss  of  Gulfstar  LLC  passed  through  and  reportable  by  Gulfstar   Energy
Corporation.

The Company  accounts for income taxes under the liability  method as prescribed
by  ASC  authoritative  guidance.   Deferred  tax  liabilities  and  assets  are
determined based on the difference between the financial statement and tax bases
of assets and  liabilities  using enacted rates  expected to be in effect during
the year in which the basis difference  reverses.  The realizability of deferred
tax assets are evaluated  quarterly and a valuation  allowance is provided if it
is more  likely  than not that the  deferred  tax  assets  will not give rise to
future  benefits  in the  Company's  income  tax  returns.  The  primary  timing
differences between financial and tax reporting arise from federal net operating
loss carryforwards, amortization of start up costs, and accrued expenses.

                                       5
<PAGE>





The Company  assessed the  likelihood of utilization of the deferred tax assets,
in light of recent and expected  continuing  losses. As a result of this review,
the deferred tax asset of $896,416 and $758,227 has been fully reserved at March
31, 2011 and December 31, 2010, respectively.  As of March 31, 2011, the Company
had net operating  loss  carryforwards  for income tax and  financial  reporting
purposes of approximately $1,567,080 expiring in the years 2020 through 2031.

The Company has adopted ASC guidance  regarding  accounting  for  uncertainty in
income  taxes.  This  guidance  clarifies  the  accounting  for income  taxes by
prescribing the minimum recognition threshold an income tax position is required
to meet before being  recognized in the financial  statements and applies to all
income tax  positions.  Each income tax  position  is assessed  using a two step
process.  A determination is first made as to whether it is more likely than not
that the income tax position will be  sustained,  based upon  technical  merits,
upon  examination  by the taxing  authorities.  If the income  tax  position  is
expected to meet the more likely than not criteria,  the benefit recorded in the
financial  statements  equals the largest amount that is greater than 50% likely
to be realized upon its ultimate  settlement.  At March 31, 2011,  there were no
uncertain tax positions that required accrual.

None of the Company's  federal or state income tax returns are  currently  under
examination  by the  Internal  Revenue  Service or state  authorities.  However,
calendar  years 2007 and later  remain  subject to  examination  by the Internal
Revenue Service and respective states.

Business Combinations

The Company  accounts for  acquisitions in accordance with guidance found in ASC
805, Business  Combinations.  The guidance,  effective January 1, 2009, requires
consideration  given,  including contingent  consideration,  assets acquired and
liabilities  assumed to be valued at their fair market values at the acquisition
date.  The  guidance  further   provides  that:  (1)  in-process   research  and
development  will be  recorded at fair value as an  indefinite-lived  intangible
assets;  (2)  acquisition  costs will  generally  be expensed as  incurred,  (3)
restructuring  costs  associated with a business  combination  will generally be
expensed  subsequent to the  acquisition  date;  and (4) changes in deferred tax
asset  valuations  and  income  tax  uncertainties  after the  acquisition  date
generally will affect income tax expense.

ASC 805  requires  that any excess of  purchase  price over fair value of assets
acquired,   including  identifiable   intangibles  and  liabilities  assumed  be
recognized as goodwill. In accordance with ASC 805, any excess off fair value of
acquired  net  assets,   including  identifiable  intangible  assets,  over  the
acquisition consideration results in a bargain purchase gain. Prior to recording
a gain,  the  acquiring  entity must  reassess  whether all acquired  assets and
assumed   liabilities   have  been   identified   and   recognized  and  perform
re-measurements  to verify that the  consideration  paid,  assets  acquired  and
liabilities assumed have been properly valued.

Loss Per Share

Loss per share requires  presentation  of both basic and diluted loss per common
share. Common share equivalents, if used, would consist of any options, warrants
and contingent  shares.  Common share  equivalents  would not be included in the
weighted average  calculation  since their effect would be anti-dilutive  due to
the net losses.  As of March 31, 2011 and  December  31,  2010,  the Company had
outstanding no options, warrants or contingent shares.

Use of Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting  principles  in the United States of America  requires  management to
make  estimates and  assumptions  that affect the reported  amount of assets and
liabilities and disclosures of contingent  assets and liabilities at the date of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the reporting  period.  Actual results could differ from those estimates,
and such differences may be material to the financial statements.

                                       6
<PAGE>




Concentration of Credit Risk

The Company,  from time to time during the periods covered by these consolidated
financial  statements,  may have bank balances in excess of its insured  limits.
Management has deemed this a normal business risk.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company  considers all cash and
highly liquid  investments with initial maturities of three months or less to be
cash equivalents.

Accounts Receivable

Accounts  receivable  are stated at their cost less any  allowance  for doubtful
accounts.  The  allowance  for  doubtful  accounts is based on the  management's
assessment of the  collectability of specific customer accounts and the aging of
the  accounts  receivable.  If  there  is  deterioration  in a major  customer's
creditworthiness   or  if  actual   defaults  are  higher  than  the  historical
experience,  the management's  estimates of the recoverability of amounts due to
the Company could be adversely affected.  Based on the management's  assessment,
no reserve is deemed necessary at March 31, 2011 and December 31, 2010.

Revenue Recognition

The Company  recognizes  revenue from its Pipeline  segment upon shipment of the
gas to its customers.  Royalty  revenue is recognized from the Company's oil and
gas property  management and exploration and production segment in the period of
production.

Property and Equipment

The Company  follows the full cost method of accounting  for oil and natural gas
operations.  Under this method, all productive and nonproductive  costs incurred
in connection  with the  acquisition,  exploration,  and  development of oil and
natural gas reserves are capitalized. No gains or losses are recognized upon the
sale  or  other  disposition  of  oil  and  natural  gas  properties  except  in
transactions that would significantly alter the relationship between capitalized
costs  and  proved  reserves.  The  costs of  unevaluated  oil and  natural  gas
properties  are excluded  from the  amortizable  base until the time that either
proven  reserves are found or it has been  determined  that such  properties are
impaired.  As properties become evaluated,  the related costs transfer to proved
oil  and  natural  gas  properties  using  full  cost  accounting.  None  of the
capitalized  costs in the amount of $306,996 were  included in the  amortization
base as of March 31, 2011,  nor did the Company  expense any  capitalized  costs
during the three months ended March 31, 2011 and 2010. The Company does not have
significant  oil and gas producing  activities as of March 31, 2011 and December
31, 2010,  and its oil and gas  properties  are still in the drilling  phase and
have not been evaluated.

Management  capitalizes  additions  to  property  and  equipment  including  its
pipeline.  Expenditures  for  repairs  and  maintenance  are charged to expense.
Property  and  equipment  are carried at cost.  Adjustment  of the asset and the
related  accumulated  depreciation  accounts are made for property and equipment
retirements  and  disposals,  with the  resulting  gain or loss  included in the
consolidated statements of operations.

In accordance  with  authoritative  guidance on accounting for the impairment of
disposal of long-lived assets, as set forth in Topic 360 of the ASC, the Company
assesses  the  recoverability  of the  carrying  value  of its  non-oil  and gas
long-lived  assets when events occur that  indicate an  impairment  in value may
exist. An impairment  loss is indicated if the sum of the expected  undiscounted
future net cash flows is less than the  carrying  amount of the assets.  If this
occurs,  an impairment  loss is recognized  for the amount by which the carrying
amount of the assets  exceeds  the  estimated  fair value of the asset.  If this
occurs,  an impairment  loss is recognized  for the amount by which the carrying
amount of the assets  exceeds the estimated  fair value of the asset.  No events
occurred  during the three  months  ended  March 31, 2011 and 2010 that would be
indicative of possible impairment.

                                       7
<PAGE>




Goodwill

In accordance with generally accepted accounting principles,  goodwill cannot be
amortized,  however, it must be tested annually for impairment.  This impairment
test is calculated at the reporting unit level. The goodwill impairment test has
two steps.  The first  identifies  potential  impairments  by comparing the fair
value of a reporting unit with its book value,  including goodwill.  If the fair
value of the  reporting  unit  exceeds  the  carrying  amount,  goodwill  is not
impaired and the second step is not necessary. If the carrying value exceeds the
fair value, the second step calculates the possible impairment loss by comparing
the implied  fair value of goodwill  with the  carrying  amount.  If the implied
goodwill is less than the carrying amount, a write-down is recorded.  Management
tests goodwill each year for impairment, or when facts or circumstances indicate
impairment has occurred.  No facts or circumstances  were noted during the three
months ended March 31, 2011, which would be indicative of possible impairment.

Intangible Assets

Intangible assets consist of right of way deposits, which are contracts allowing
the Company to install  pipeline on private land. The rights exist  indefinitely
and  therefore,  no  amortization  has been recorded.  Management  evaluates the
assets  for  impairment  whenever  events or  circumstances  indicate a possible
impairment.

Significant Customer

The Company's  pipeline  construction  was finished during the second quarter of
2010 and is  currently  delivering  natural  gas to one  manufacturing  customer
located in Kentucky.  Revenue  earned from the oil and gas  property  management
segment  and  exploration  and  production  segment  are  determined  based upon
division orders with one purchaser.

Depreciation

For  financial  reporting  purposes,  depreciation  of property and equipment is
computed  using the  straight-line  method over the  estimated  useful  lives of
assets at  acquisition.  For  income tax  reporting  purposes,  depreciation  of
property  and  equipment is computed  using the  straight-line  and  accelerated
methods over the estimated useful lives of assets at acquisition.

Recent Accounting Pronouncements

There were  accounting  standards  and  interpretations  issued during the three
months  ended  March 31,  2011,  none of which are  expected  to have a material
impact on the Company's financial position, operations or cash flows.

NOTE 2 - SIGNIFICANT ACQUISITIONS

Effective June 30, 2010, the Company acquired 100% of the issued and outstanding
stock of Talon. Talon provides  management  services in the oil and gas industry
and the ability to obtain capital.  As a result of the acquisition,  the Company
has been able to use this management experience as well as the ability to obtain
capital for the  acquisitions  and  development of oil and gas  properties.  The
acquisition  was  accounted  for using the purchase  method in  accordance  with
guidance provided in Topic 805 of the Codification.

                                       8
<PAGE>




The following  table presents the allocation of the purchase price to the assets
acquired and liabilities assumed, based on their fair values at June 30, 2010:

<TABLE>
<CAPTION>
<S>                                                                        <C>               <C>

                  Purchase price

                  Accrued liabilities in excess of cash                    $263,083
                    3,509,530 shares of the Company common
                      Stock valued at $.03 per share                       $105,286
                                                                           --------

                  Total consideration                                                        $368,369
                                                                                             ========

                  Allocation of purchase price
                    Goodwill                                               $368,369
                                                                           --------

                  Net assets acquired                                                        $368,369
                                                                                             ========

</TABLE>

Goodwill  associated  with the  above  transaction  is not  amortizable  for tax
purposes.


NOTE 3 - GOING CONCERN AND MANAGEMENTS' PLAN

As shown in the accompanying consolidated financial statements,  the Company has
recognized  a net loss of $417,429 for the three months ended March 31, 2011 and
reported an accumulated  deficit of  $4,750,132.  At March 31, 2011, the Company
had total current assets of $657,999 and total current liabilities of $1,784,901
for a working capital deficient of $1,126,902.

To the extent the Company's  operations are not sufficient to fund the Company's
capital  requirements;  the Company will attempt to enter into a revolving  loan
agreement with a financial  institution or attempt to raise capital  through the
sale of additional capital stock or through the issuance of debt. At the present
time,  the Company does not have a revolving  loan  agreement with any financial
institution nor can the Company provide  assurance that it will be able to enter
into any such  agreement  in the future or be able to raise  funds  through  the
further issuance of debt or equity in the Company.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern, however, the above conditions
raise  substantial  doubt about the Company's ability to do so. The Consolidated
financial  statements  do not include  any  adjustment  to reflect the  possible
future effect on the  recoverability and classification of assets or the amounts
and  classifications of liabilities that may result should the Company be unable
to continue as a going concern.

NOTE 4 - RELATED PARTY TRANSACTIONS

Note Receivable

At December 31, 2009, the Company was owed $82,325 from an officer. The note was
non-interest  bearing,  unsecured  and due no later  than two  years  after  the
completion of the pipeline,  which was  completed  during the second  quarter of
2010.  During second  quarter of 2010 and prior to the  acquisition  of Gulfstar
LLC, the note receivable was written-off as compensation expense.

                                       9
<PAGE>




Oil and Gas Proceeds due to Others

As  described  in Note 6, the  Company  owed  oil and gas  proceeds  to  working
interest owners  totaling  $31,587 and $33,477 as of March 31, 2011 and December
31, 2010, respectively.

Note Payable

During the three months ended March 31, 2011, the Company  borrowed $40,000 from
an  affiliate  of a  member-manager  of  Gulfstar  LLC  and a  greater  than  5%
shareholder of the Company and in exchange  issued an unsecured  promissory note
dated  January  4,  2011  that is due in full on or before  December  31,  2011.
Interest is accrued at the rate of one percent (1.0%) per annum. As of March 31,
2011, the Company owes $40,000 on the promissory note.

During  the year  ended  December  31,  2010,  the  Company  borrowed a total of
$335,078  from an  affiliate of a  member-manager  of Gulfstar LLC and a greater
than  5%  shareholder  of  the  Company  and in  exchange  issued  an  unsecured
promissory  note  dated  November  30,  2011  that is due in  full on or  before
December  31,  2011.  Interest is accrued at the rate of one percent  (1.0%) per
annum. As of March 31, 2011, the Company owes $330,289 on the promissory note.

                                       10
<PAGE>




NOTE 5 - PROPERTY AND EQUIPMENT

Property and equipment consist of the following at:
<TABLE>
<CAPTION>
<S>                                                                                <C>


                                                             March 31,             December 31,
                                                               2011                   2010
                                                               ----                   ----
Pipeline                                                  $   4,194,885             $4,119,885
Oil and Gas Properties (in process)                             306,996                287,024
Office Equipment                                                 26,654                 27,014
Vehicles                                                        103,940                103,940
Land                                                             50,000                 50,000
                                                           ------------             ----------
    Total Property & Equipment                                4,682,475              4,587,863
Less Accumulated Depreciation                                  (239,409)              (183,549)
     Net Property & Equipment                             $   4,443,066             $4,404,314
                                                            ===========             ==========
</TABLE>

Depreciation expense was $55,860 and $4,386, respectively,  for the three months
ended March 31, 2011 and 2010.

NOTE 6 - DRILLING VENTURES

The Company holds overriding royalty interests in various wells in Kentucky. The
Company  syndicated the financing of these wells through offering a 100% working
interest in the wells in exchange for  contribution of funds to drill the wells.
As part of the transaction,  the Company retained approximately 12.5% overriding
royalty interests in the wells and also agreed to provide management services on
behalf of the working  interest owners in the wells.  This income from the wells
earned by the  Company is reported as royalty  income as  reflected  in Note 9 -
Information on business segments.

As part of the management services provided,  the Company collects the royalties
generated from the wells on behalf of the working  interest  owners and pays the
various costs and expenses  incurred on behalf of the wells. The Company records
no costs or expenses  relative to these wells on its consolidated  statements of
operations.  The excess of the  royalties  collected by the Company on behalf of
the working  interest owners were recorded as oil and gas proceeds due to others
on the  consolidated  balance  sheets  of the  Company.  At March  31,  2011 and
December  31, 2010,  the Company  owed oil and gas proceeds to working  interest
owners in the amount of $31,587 and $33,477, respectively.

NOTE 7- LITIGATION SETTLEMENT PAYMENT

In March 2010, the Company settled certain environmental litigation. As a result
of the settlement, the Company was required to pay $70,000 during the year ended
December 31, 2010. This amount was paid by the Company during the second quarter
of 2010, in addition to $100,000,  which was paid during the year ended December
31,  2009.  As  a  result,  $170,000  was  recorded  as  other  expense  in  the
consolidated  statement  of  operations  for the year ended  December  31, 2009.
Additionally,  the Company received $230,000 from a consultant contracted by the
Company for  services  provided  related to the  environmental  litigation.  The
income from the  settlement  with the  consultant was recognized as other income
during the first quarter of 2010.

In  February,  2009,  the Company  received  two Notices of  Violation  from the
Commonwealth  of Kentucky's  Energy and  Environment  Cabinet  ("Cabinet")  as a
result of the  Company's  failure  to obtain  appropriate  permits in advance of
certain  construction  activities  and  for  "causing  or  contributing  to  the
pollution  of the waters of the  Commonwealth  of  Kentucky"  during  2007.  The
Company neither admitted to nor denied the alleged violations but accepted civil
responsibility  for the violations on May 6, 2010. As a result of the settlement
of the  dispute,  the  Company  agreed to pay a civil  penalty of $60,000 to the
Commonwealth  of  Kentucky  by way of 12  equal  monthly  installment  payments,
beginning  in  May  of  2010.   The  Company   recorded  a  $60,000   General  &
Administration  Expense  during the  second  quarter  of 2010 to  recognize  the
settlement  with the Cabinet and as of March 31, 2011, the liability was paid in
full.

                                       11

<PAGE>





NOTE 8 - INFORMATION ON BUSINESS SEGMENTS

The Company operates in three business segments:  Pipeline, Oil and Gas Property
Management, and Exploration and Production.

Pipeline

Gulfstar  LLC has built and  currently  operates a 16-mile  nature gas  pipeline
located in Western Kentucky for the  transportation of natural gas. The pipeline
operations  transport gas to a burner tip processing  plant located near Bowling
Green, Kentucky where it is sold pursuant to a gas purchase agreement.  Pipeline
revenue is recognized upon delivery of the gas to its customer. The pipeline has
a throughput capacity of 18 Million Cubic Feet per day (MMcf/d). The pipeline is
currently  not  operating at full  capacity as it  transported  an average of 79
Mcf/d of gas during the three months ended March 31, 2011.  The pipeline was not
operational as of March 31, 2010.

Oil and Gas Property Management ("O&G Property Mgmt")

Gulfstar  LLC is the  manager  and  operator  of 20 wells in  Western  Kentucky.
Gulfstar  LLC  offers  working  interests  in the  properties  on  behalf of the
leaseholders.  Using these funds,  Gulfstar  LLC pays for the costs  incurred in
drilling,  reworking  and  development  of the  wells.  Gulfstar  LLC  holds  an
overriding  royalty interest of approximately  12.5% and holds mineral rights on
approximately  9,000 acres of leased land.  Gulfstar collects revenues on behalf
of the working interest  holders and distributes each working interest  holders'
share of revenue  when  collected.  A  receivable  is  recorded  for oil and gas
revenue  when earned and a related  payable due to interest  holders is recorded
net of the 12.5% revenue interest and direct costs due to Gulfstar LLC.

Exploration and Production ("E&P")

During the fourth quarter of 2010, Gulfstar LLC began drilling a horizontal well
located in Warren County,  Kentucky with total  capitalized costs of $292,636 as
of March  31,  2011.  Gulfstar  LLC owns a working  interest  of 58.4% and a net
revenue  interest of 43.8% in this well and anticipates  completion of this well
during the second quarter of 2011. After completion,  the well will be connected
to the Gulfstar LLC's pipeline for delivery of gas.

The  following  data is presented for the Company's  three  operating  segments:
Pipeline, O&G Property Mgmt and E&P.


<TABLE>
<CAPTION>
<S>                                                                               <C>

                                                               Three Months Ended March 31,
                                                 ---------------------------------------------------------
                                                           2011                            2010
                                                           ----                            ----
Net Revenues
   Pipeline                                              $17,122                          $   -
   O&G Property Mgmt                                       9,037                           4,169
   E&P                                                    19,533                              -
                                                 -------------------------        ------------------------
   Total Net Revenues                                     45,692                           4,169
Operating Income (Loss)
   Pipeline                                              (68,329)                             -
  O&G Property Mgmt                                        9,037                           4,169
   E&P                                                    19,533                              -
   Corporate                                            (475,762)                       (201,632)
                                                 -------------------------        ------------------------
Total Operating Loss                                    (515,521)                       (197,463)
                                                 -------------------------        ------------------------
Other Income (Expense)                                      (915)                        231,635
                                                 -------------------------        ------------------------
Pre-Tax Loss                                           $(516,436)                        $33,902
                                                 =========================        ========================

</TABLE>

                                       12

<PAGE>
<TABLE>
<CAPTION>
<S>                                                                                  <C>





                                                      March 31, 2011                 December 31, 2010
                                                      --------------                 -----------------
Total Assets
   Pipeline                                                $4,230,582                          $4,213,513
   O&G Property Mgmt                                           17,712                               3,758
   E&P                                                        726,865                             706,893
   Corporate                                                  665,149                             170,456
                                                      ---------------                --------------------
Total Assets                                          $     5,640,308                          $5,076,669
                                                      ===============                ====================
</TABLE>

NOTE 9 - STOCKHOLDERS' EQUITY

Preferred Shares

The Company is authorized to issue 100,000,000  shares of no par value preferred
stock.  As of March 31, 2011 and December  31,  2010,  the Company has no shares
issued and outstanding.

Common Shares

The Company is  authorized  to issue  200,000,000  shares of $.001 voting common
stock. At March 31, 2011 and December 31, 2010, there were a total of 17,574,088
and 16,985,086 shares of common stock issued and outstanding,  respectively.  On
May 5, 2010,  the Board of Directors  of the Company  authorized a one share for
eight share  reverse  stock split,  effective on May 5, 2010.  All share and per
share references have been adjusted for the reverse split.

Stock Option Plan

In the first  quarter of 2011,  the Company  adopted the 2011 Stock Option Plan.
The maximum  number of shares of common stock  reserved  for issuance  under the
plan is  3,000,000  shares.  The number of shares,  however,  may be adjusted to
reflect certain corporate transactions or changes in our capital structure.  All
employees  of the  Company and its  subsidiaries,  including  employees  who are
officers or members of our board of directors  and  non-employee  members of our
board of directors are eligible to  participate  in the plan.  In addition,  key
advisors who perform  services for the Company and its subsidiaries are eligible
to participate in the plan. The plan is  administered  by our board of directors
and they have the authority to, among other  things,  select plan  participants,
determine the type and amount of awards,  determine  awards terms, and interpret
the plan and any plan awards. During any calendar year, participants are limited
in the  number of grants  they may  receive  under  the  plan.  In any year,  an
individual  may not  receive  options  for more than  300,000  shares.  The plan
requires  that the exercise  price for stock options be equal to or greater than
the fair  market  value of our  common  stock on the date of the  grant.  If the
option  is  granted  to an  employee  who,  at the  time of  grant,  owns  stock
possessing  more than ten  percent  of the total  combined  voting  power of all
classes of stock of the Company or subsidiary of the Company, the exercise price
shall not be less than  one-hundred  and ten percent of the fair market value of
our common stock on the date of the grant.  As of March 31, 2011, no shares have
been issued in relation to the 2011 Stock Option Plan.

NOTE 10 - AGREEMENTS

On October 18, 2010, the Company entered into a Letter of Intent with Timberline
Production Company,  LLC of Casper, WY to purchase 100% of the working interests
in and assets connected to oil and gas leases located in the Greasewood Field in
Niobrara  County,  WY  for  cash  of  $75  Million.  In  conjunction  with  this
transaction,  the Company revised its engagement with Maxim Group LLC to provide
gross  proceeds  of up to $100  Million  from a proposed  private  placement  of
Company  equity  and/or  convertible  debt.  The  precise  terms of the  private
placement will be negotiated  between Maxim Group LLC,  potential  investors and
the Company.

On January 19, 2011, the Company  signed a Letter  Agreement with Wright Capital
Corporation  to pursue a proposed  financing  of up to $90 Million to be used to
assist the Company in the proposed purchase of Timberline  Production  Company's
100% working  interest in oil and gas leases and for the further  development of
the Company's existing pipeline  structure in Kentucky.  The definitive terms of
the proposed  transaction  are subject to an agreement  between  Wright  Capital
Corporation and the Company.

NOTE 11 - GULFSTAR LLC CASH DISTRIBUTIONS

The Gulfstar LLC operating  agreement  provides a priority  preference as to any
future  cash  distributions  paid by  Gulfstar  LLC to the  owners of its equity
interests.  As such, fifty percent (50%) of all cash distributions shall be paid
first to the non-controlling equity interests until such time they have received
in full their capital contributions.  After which time, cash distributions shall
be paid in proportion to the percentage of all equity interests. As of March 31,
2011  and  December   31,  2010,   Gulfstar  LLC  has  not  repaid  any  of  the
non-controlling equity interests' capital contributions.


                                       13


<PAGE>




ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The  following  discussion  should  be read in  conjunction  with our  unaudited
financial  statements and notes thereto included herein. In connection with, and
because we desire to take  advantage  of, the "safe  harbor"  provisions  of the
Private  Securities  Litigation Reform Act of 1995, we caution readers regarding
certain forward looking statements in the following  discussion and elsewhere in
this report and in any other statement made by, or on our behalf, whether or not
in future filings with the Securities and Exchange  Commission.  Forward-looking
statements are statements not based on historical  information  and which relate
to future  operations,  strategies,  financial  results  or other  developments.
Forward looking  statements are necessarily based upon estimates and assumptions
that are inherently  subject to significant  business,  economic and competitive
uncertainties and  contingencies,  many of which are beyond our control and many
of which,  with  respect to future  business  decisions,  are subject to change.
These  uncertainties and contingencies can affect actual results and could cause
actual results to differ  materially from those expressed in any forward looking
statements  made by, or on our behalf.  We  disclaim  any  obligation  to update
forward-looking statements.

 OPERATIONS
 ----------

On January 19, 2011, the Company  signed a Letter  Agreement with Wright Capital
Corporation  to pursue a proposed  financing  of up to $90 Million to be used to
assist the Company in the proposed purchase of Timberline  Production  Company's
100% working  interest in and assets connected to oil and gas leases and for the
further  development of the Company's  existing pipeline  structure in Kentucky.
The  definitive  terms of the proposed  transaction  are subject to an agreement
between Wright Capital  Corporation  and the Company.  As of March 31, 2011, the
Company  is in the  due  diligence  stage  of  acquiring  assets  as part of its
exploration  and production  segment and  anticipates  significant  revenue from
operations will be obtained as a result of this acquisition.

During  the second  half of 2010,  Gulfstar  LLC  started  transporting  limited
quantities of gas via its pipeline  system.  In addition to the  management  and
operation  of the  pipeline,  Gulfstar LLC operates as a manager and operator of
approximately  20  natural  gas wells.  Gulfstar  LLC holds  overriding  royalty
interests of approximately  12.5% in the wells.  Gulfstar LLC has financed these
wells  through  offering a 100%  working  interest in the wells in exchange  for
contribution of funds to drill the wells and therefore does not hold any working
interest in the wells.  As of March 31, 2011, the Company is evaluating  various
alternatives  to increase the flow of natural gas through the pipeline system as
the  Company  considers  the  current  flow of  natural  gas to be at a minimum,
compared to its full capacity.

Therefore,  the Company is  currently  operating  at a minimum its  pipeline gas
gathering  system and managing the existing oil and gas wells and its main focus
is to be  involved  in oil and gas  exploration  and  development.  The  Company
intends to leverage its assets to develop  energy  prospects for its own account
or co-venture with other  companies,  which can benefit from an association with
the Company's management.

The  Company's  strategic  focus in this area is on lower  risk  profile  income
producing oil and gas assets that have sizable developmental  drilling potential
with  multiple  pay zones.  The Company  intends to focus its  initial  pipeline
development  efforts on private producers of constrained and shut-in natural gas
assets in Western Kentucky. The Company intends to provide producers in its area
with a  turnkey  solution  of  access to an  additional  developmental  drilling
partner,  midstream management, and to provide an economical downstream solution
to move existing production towards liquidity.

The Company  will need  substantial  additional  capital to support its proposed
future operations and as such is aggressively seeking this capital, as evidenced
by its current arrangement with Wright Capital Corporation.  Nonetheless,  there
are currently  minimal  revenues and limited  committed  sources for  additional
funds as of the date hereof.  No  representation  is made that any funds will be
available  when needed.  In the event funds  cannot be raised when  needed,  the
Company  may not be able to carry  out its  business  plan,  may  never  achieve
projected  levels of sales or royalty  income,  and could fail in  business as a
result of these uncertainties.

                                       14
<PAGE>




RESULTS OF OPERATIONS
---------------------

For the Three  Months  Ended March 31, 2011  Compared to the Three  Months Ended
March 31, 2010

During the three  months  ended March 31, 2011,  we  recognized  net revenues of
$45,692 with corresponding direct costs of $8,431 for a gross profit of $37,261.
During the three months ended March 31, 2010, we recognized revenues of $4,169.

During the three  months  ended  March 31,  2011,  we incurred  total  operating
expenses of $552,782  compared to $201,632  during the three  months ended March
31,  2010.  The  increase of $351,150  was a result of  increases in general and
administrative expenses resulting from both the increased operational activities
of the Company as a result of completion  of the pipeline  during the first half
of last year and the  Company's  expenses  related  to its  compliance  with the
financial  reporting  requirements  of the SEC.  Management  of the Company does
expect  that  operational  expenses  to stable  as the  Company  focuses  on its
operational activities.

During the three months ended March 31, 2011, we incurred a net loss of $417,429
compared to net income of $33,902  during the three months ended March 31, 2010.
The  increase in net loss of $451,331 is a result of the  increase of $33,092 in
revenues offset by the $351,150 increase in general and administrative expenses,
the $232,280 increase in other expenses and the $99,007 of net loss attributable
to the non-controlling interest.

LIQUIDITY
---------

At March  31,  2011,  we had total  current  assets of  $657,999  consisting  of
$575,929  in cash and cash  equivalents,  $31,466  in  accounts  receivable  and
$50,604 in prepaids and other  assets.  At June 30, 2010,  we had total  current
liabilities of $1,784,901,  consisting of $823,373 in accounts payable,  $31,587
in oil and gas proceeds which are due to others, $370,289 in related party notes
payable and $550,652 in accrued liabilities. At March 31, 2011, we had a working
capital deficit of $1,126,902 and an accumulated deficit of $4,750,132.

During the three months  ended March 31,  2011,  we used net cash of $533,995 in
operational  activities.  During the three months ended March 31, 2010,  we used
net cash of $169,240 from operational activities.

During the three  months  ended  March 31,  2011,  we  recognized  a net loss of
$417,429,  which was  adjusted  for a non-cash  activity of $55,860 and net loss
attributable to the non-controlling interest of $99,007. During the three months
ended March 31, 2010, we recognized a net income of $33,902,  which was adjusted
for a non-cash activity of $4,386.

During the three months ended March 31, 2011,  the Company used funds of $19,612
in its investing  activities.  Investing  activities  included  expenditures  of
$19,612 in oil and gas properties.

During the three months ended March 31, 2010,  the Company used  $458,787 in its
investing activities.  Investing activities included expenditures of $458,787 in
construction of the pipeline.

During the three months ended March 31, 2011,  the Company  received  $1,063,737
net  proceeds  from its  financing  activities.  Financing  activities  included
$1,028,526  in  issuance of shares and equity  contributions  and $35,211 in net
proceeds from a related party note payable.

During the three months ended March 31, 2010, the Company received $538,791 from
its financing  activities.  Financing  activities  during the three months ended
March 31, 2010,  included equity  contributions  of $557,791 and $19,000 paid in
equity redemptions.

During the three months ended March 31, 2011, the Company  borrowed $40,000 from
an  affiliate  of a  member-manager  of  Gulfstar  LLC  and a  greater  than  5%
shareholder of the Company and in exchange  issued an unsecured  promissory note
dated  January  4,  2011  that is due in full on or before  December  31,  2011.
Interest is accrued at the rate of one percent (1.0%) per annum. As of March 31,
2011, the Company owes $40,000 on the promissory note.

                                       15
<PAGE>




During  the year  ended  December  31,  2011,  the  Company  borrowed a total of
$335,078  from an  affiliate of a  member-manager  of Gulfstar LLC and a greater
than  5%  shareholder  of  the  Company  and in  exchange  issued  an  unsecured
promissory  note  dated  November  30,  2011  that is due in  full on or  before
December  31,  2011.  Interest is accrued at the rate of one percent  (1.0%) per
annum. As of March 31, 2011, the Company owes $330,289 on the promissory note.

The Gulfstar LLC operating  agreement  provides a priority  preference as to any
future  cash  distributions  paid by  Gulfstar  LLC to the  owners of its equity
interests.  As such, fifty percent (50%) of all cash distributions shall be paid
first to the non-controlling equity interests until such time they have received
in full their capital contributions.  After which time, cash distributions shall
be paid in proportion to the percentage of all equity interests. As of March 31,
2011, Gulfstar LLC has not repaid any of the  non-controlling  equity interests'
capital contributions.

Capital Resources

We have only common stock as our capital resource.

We have no material  commitments for capital  expenditures within the next year,
however if operations are commenced,  substantial  capital will be needed to pay
for participation, investigation, exploration, acquisition and working capital.

Need for Additional Financing

We do not have capital  sufficient to meet our cash needs.  We will have to seek
loans or equity placements to cover such cash needs and therefore the Company:

On October 18, 2010, the Company entered into a Letter of Intent with Timberline
Production Company,  LLC of Casper, WY to purchase 100% of the working interests
in and assets connected to oil and gas leases located in the Greasewood Field in
Niobrara  County,  WY  for  cash  of  $75  Million.  In  conjunction  with  this
transaction,  the Company revised its engagement with Maxim Group LLC to provide
gross  proceeds  of up to $100  Million  from a proposed  private  placement  of
Company  equity  and/or  convertible  debt.  The  precise  terms of the  private
placement will be negotiated  between Maxim Group LLC,  potential  investors and
the Company.

Further,  on January 19, 2011, the Company signed a Letter Agreement with Wright
Capital  Corporation  to pursue a proposed  financing of up to $90 Million to be
used to assist the Company in the  proposed  purchase of  Timberline  Production
Company's  100% working  interest in and assets  connected to oil and gas leases
and for the further  development of the Company's existing pipeline structure in
Kentucky.  The definitive  terms of the proposed  transaction  are subject to an
agreement between Wright Capital Corporation and the Company.

No commitments to provide  additional  funds have been made by our management or
other stockholders.  Accordingly,  there can be no assurance that any additional
funds will be  available  to us to allow it to cover our expenses as they may be
incurred.

Going Concern

As shown in the accompanying consolidated financial statements,  the Company has
recognized  a net loss of $417,429 for the three months ended March 31, 2011 and
reported an accumulated  deficit of  $4,750,132.  At March 31, 2011, the Company
had total current assets of $657,999 and total current liabilities of $1,784,901
for a working capital deficit of $1,126,902.

To the extent the Company's  operations are not sufficient to fund the Company's
capital  requirements;  the Company will attempt to enter into a revolving  loan
agreement with a financial  institution or attempt to raise capital  through the
sale of additional capital stock or through the issuance of debt. At the present
time,  the Company does not have a revolving  loan  agreement with any financial
institution nor can the Company provide  assurance that it will be able to enter
into any such  agreement  in the future or be able to raise  funds  through  the
further issuance of debt or equity in the Company.

Management is actively  pursuing  additional  financing and revenue solutions as
stated elsewhere in this report.

                                       16
<PAGE>

CRITICAL ACCOUNTING POLICIES

Gulfstar  has  identified  the  policies  below  as  critical  to  its  business
operations and the understanding of results from operations.  The impact and any
associated risks related to these policies on the Company's business  operations
is  discussed  throughout  Management's  Discussion  and  Analysis of  Financial
Conditions  and Results of  Operations  where such  policies  affect  Gulfstar's
reported  and  expected  financial  results.  For a detailed  discussion  on the
application of these and other accounting  policies,  see Note 1 in the Notes to
the Financial  Statements.  Note that  Gulfstar's  preparation  of this document
requires  Gulfstar to make  estimates and  assumptions  that affect the reported
amounts  of  assets  and  liabilities,   disclosure  of  contingent  assets  and
liabilities  at the date of Gulfstar's  financial  statements,  and the reported
amounts of expenses during the reporting periods. There can be no assurance that
actual results will not differ from those estimates.

Principles of Consolidation

Gulfstar  LLC  was  determined  to be the  accounting  acquirer  in the  reverse
recapitalization  that  occurred on June 30, 2010.  As a result,  all  financial
information  prior to June 30, 2010 will  include  only the accounts of Gulfstar
LLC.  Subsequent to June 30, 2010, the accompanying  financial  information will
include the accounts of Gulfstar,  its wholly owned  subsidiary,  Talon, and its
majority owned subsidiary,  Gulfstar LLC. All significant inter-company balances
and transactions have been eliminated during consolidation.

Revenue Recognition

The Company  recognizes  revenue from its Pipeline  segment upon shipment of the
gas to its customers.  Royalty  revenue is recognized from the Company's oil and
gas property  management and exploration and production segment in the period of
production.

Accounts Receivable

Accounts  receivable  are stated at their cost less any  allowance  for doubtful
accounts.  The  allowance  for  doubtful  accounts is based on the  management's
assessment of the  collectability of specific customer accounts and the aging of
the  accounts  receivable.  If  there  is  deterioration  in a major  customer's
creditworthiness   or  if  actual   defaults  are  higher  than  the  historical
experience,  the management's  estimates of the recoverability of amounts due to
the Company could be adversely affected.  Based on the management's  assessment,
no reserve is deemed necessary at March 31, 2011 and December 31, 2010.

Non-controlling Interest

The non-controlling  interest is related to Gulfstar LLC, which is consolidated,
but not wholly owned by the Company. At March 31, 2011, the Company owned 58% of
the equity interest of Gulfstar LLC and therefore,  the non-controlling interest
of 42% was  $1,293,892.  At December  31, 2010,  the Company  owned 58.4% of the
equity interest of Gulfstar LLC and therefore,  the non-controlling  interest of
41.6% was $1,287,171.

Property and Equipment

The Company  follows the full cost method of accounting  for oil and natural gas
operations.  Under this method, all productive and nonproductive  costs incurred
in connection  with the  acquisition,  exploration,  and  development of oil and
natural gas reserves are capitalized. No gains or losses are recognized upon the
sale  or  other  disposition  of  oil  and  natural  gas  properties  except  in
transactions that would significantly alter the relationship between capitalized
costs  and  proved  reserves.  The  costs of  unevaluated  oil and  natural  gas
properties  are excluded  from the  amortizable  base until the time that either
proven  reserves are found or it has been  determined  that such  properties are
impaired.  As properties become evaluated,  the related costs transfer to proved
oil  and  natural  gas  properties  using  full  cost  accounting.  None  of the
capitalized  costs in the amount of $306,996 were  included in the  amortization
base as of March 31, 2011,  nor did the Company  expense any  capitalized  costs
during the three months ended March 31, 2011 and 2010. The Company does not have
significant  oil and gas producing  activities as of March 31, 2011 and December
31, 2010,  and its oil and gas  properties  are still in the drilling  phase and
have not been evaluated.

                                       17
<PAGE>




Management  capitalizes  additions  to  property  and  equipment  including  its
pipeline.  Expenditures  for  repairs  and  maintenance  are charged to expense.
Property  and  equipment  are carried at cost.  Adjustment  of the asset and the
related  accumulated  depreciation  accounts are made for property and equipment
retirements  and  disposals,  with the  resulting  gain or loss  included in the
consolidated statements of operations.

In accordance  with  authoritative  guidance on accounting for the impairment of
disposal of long-lived assets, as set forth in Topic 360 of the ASC, the Company
assesses  the  recoverability  of the  carrying  value  of its  non-oil  and gas
long-lived  assets when events occur that  indicate an  impairment  in value may
exist. An impairment  loss is indicated if the sum of the expected  undiscounted
future net cash flows is less than the  carrying  amount of the assets.  If this
occurs,  an impairment  loss is recognized  for the amount by which the carrying
amount of the assets  exceeds  the  estimated  fair value of the asset.  If this
occurs,  an impairment  loss is recognized  for the amount by which the carrying
amount of the assets  exceeds the estimated  fair value of the asset.  No events
occurred  during the three  months  ended  March 31, 2011 and 2010 that would be
indicative of possible impairment.

Goodwill

In accordance with generally accepted accounting principles,  goodwill cannot be
amortized,  however, it must be tested annually for impairment.  This impairment
test is calculated at the reporting unit level. The goodwill impairment test has
two steps.  The first  identifies  potential  impairments  by comparing the fair
value of a reporting unit with its book value,  including goodwill.  If the fair
value of the  reporting  unit  exceeds  the  carrying  amount,  goodwill  is not
impaired and the second step is not necessary. If the carrying value exceeds the
fair value, the second step calculates the possible impairment loss by comparing
the implied  fair value of goodwill  with the  carrying  amount.  If the implied
goodwill is less than the carrying amount, a write-down is recorded.  Management
tests goodwill each year for impairment, or when facts or circumstances indicate
impairment has occurred.  No facts or circumstances  were noted during the three
months ended March 31, 2011, which would be indicative of possible impairment.

Intangible Assets

Intangible assets consist of right of way deposits, which are contracts allowing
the Company to install  pipeline on private land. The rights exist  indefinitely
and  therefore,  no  amortization  has been recorded.  Management  evaluates the
assets  for  impairment  whenever  events or  circumstances  indicate a possible
impairment.

Significant Customer

The Company's  pipeline  construction  was finished during the second quarter of
2010 and is  currently  delivering  natural  gas to one  manufacturing  customer
located in Kentucky.  Revenue  earned from the oil and gas  property  management
segment  and  exploration  and  production  segment  are  determined  based upon
division orders with one purchaser.

Income Taxes

Gulfstar  LLC,  a limited  liability  company,  is not a tax  paying  entity for
Federal  income tax  purposes.  It's pro rata  share of  income,  losses and tax
credits is passed  through to its members  and  reported by its members on their
individual income tax returns. The consolidated  statement of operations for the
three  months  ended  March  31,  2010  and for the  period  from  May 19,  2006
(inception)  through  March 31, 2010  include the accounts of Gulfstar LLC only,
therefore,  no provision for federal income taxes or for deferred taxes has been
determined.  The Company  has  determined,  for the period June 1, 2010  through
December 31, 2010 and for the period January 1, 2011 through March 31, 2011, any
provision  for income taxes or deferred  taxes and this  determination  has been
based upon the accounts of Gulfstar Energy  Corporation,  Talon and the pro rata
loss  of  Gulfstar  LLC  passed  through  and  reportable  by  Gulfstar   Energy
Corporation.

                                       18
<PAGE>




The Company  accounts for income taxes under the liability  method as prescribed
by  ASC  authoritative  guidance.   Deferred  tax  liabilities  and  assets  are
determined based on the difference between the financial statement and tax bases
of assets and  liabilities  using enacted rates  expected to be in effect during
the year in which the basis difference  reverses.  The realizability of deferred
tax assets are evaluated  quarterly and a valuation  allowance is provided if it
is more  likely  than not that the  deferred  tax  assets  will not give rise to
future  benefits  in the  Company's  income  tax  returns.  The  primary  timing
differences between financial and tax reporting arise from federal net operating
loss carryforwards, amortization of start up costs, and accrued expenses.

The Company  assessed the  likelihood of utilization of the deferred tax assets,
in light of recent and expected  continuing  losses. As a result of this review,
the deferred tax asset of $896,416 and $758,227 has been fully reserved at March
31, 2011 and December 31, 2010, respectively.  As of March 31, 2011, the Company
had net operating  loss  carryforwards  for income tax and  financial  reporting
purposes of approximately $1,567,080 expiring in the years 2020 through 2031.

The Company has adopted ASC guidance  regarding  accounting  for  uncertainty in
income  taxes.  This  guidance  clarifies  the  accounting  for income  taxes by
prescribing the minimum recognition threshold an income tax position is required
to meet before being  recognized in the financial  statements and applies to all
income tax  positions.  Each income tax  position  is assessed  using a two step
process.  A determination is first made as to whether it is more likely than not
that the income tax position will be  sustained,  based upon  technical  merits,
upon  examination  by the taxing  authorities.  If the income  tax  position  is
expected to meet the more likely than not criteria,  the benefit recorded in the
financial  statements  equals the largest amount that is greater than 50% likely
to be realized upon its ultimate  settlement.  At March 31, 2011,  there were no
uncertain tax positions that required accrual.

None of the Company's  federal or state income tax returns are  currently  under
examination  by the  Internal  Revenue  Service or state  authorities.  However,
calendar  years 2007 and later  remain  subject to  examination  by the Internal
Revenue Service and respective states.

Business Combinations

The Company  accounts for  acquisitions in accordance with guidance found in ASC
805, Business  Combinations.  The guidance,  effective January 1, 2009, requires
consideration  given,  including contingent  consideration,  assets acquired and
liabilities  assumed to be valued at their fair market values at the acquisition
date.  The  guidance  further   provides  that:  (1)  in-process   research  and
development  will be  recorded at fair value as an  indefinite-lived  intangible
assets;  (2)  acquisition  costs will  generally  be expensed as  incurred,  (3)
restructuring  costs  associated with a business  combination  will generally be
expensed  subsequent to the  acquisition  date;  and (4) changes in deferred tax
asset  valuations  and  income  tax  uncertainties  after the  acquisition  date
generally will affect income tax expense.

ASC 805  requires  that any excess of  purchase  price over fair value of assets
acquired,   including  identifiable   intangibles  and  liabilities  assumed  be
recognized as goodwill. In accordance with ASC 805, any excess off fair value of
acquired  net  assets,   including  identifiable  intangible  assets,  over  the
acquisition consideration results in a bargain purchase gain. Prior to recording
a gain,  the  acquiring  entity must  reassess  whether all acquired  assets and
assumed   liabilities   have  been   identified   and   recognized  and  perform
re-measurements  to verify that the  consideration  paid,  assets  acquired  and
liabilities assumed have been properly valued.

Recent Accounting Pronouncements

There were  accounting  standards  and  interpretations  issued during the three
months  ended  March 31,  2011,  none of which are  expected  to have a material
impact on the Company's financial position, operations or cash flows.


ITEM 3.  QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not Applicable

                                       19
<PAGE>




ITEM 4.  CONTROLS AND PROCEDURES

Disclosures Controls and Procedures

We have adopted and maintain disclosure controls and procedures (as such term is
defined in Rules 13a 15(e) and 15d-15(e)  under the  Securities  Exchange Act of
1934,  as  amended  (the  "Exchange  Act"))  that are  designed  to ensure  that
information  required to be disclosed in our reports  under the Exchange Act, is
recorded,  processed,  summarized and reported within the time periods  required
under  the  SEC's  rules and forms  and that the  information  is  gathered  and
communicated to our management, including our Chief Executive Officer (Principal
Executive Officer) and Chief Financial Officer (Principal Financial Officer), as
appropriate, to allow for timely decisions regarding required disclosure.

As  required  by SEC Rule  15d-15(b),  our  Chief  Executive  Officer  and Chief
Financial  Officer  for  the  quarter  ended  March  31,  2011,  carried  out an
evaluation  under the supervision and with the  participation of our management,
of the effectiveness of the design and operation of our disclosure  controls and
procedures  pursuant  to  Exchange  Act Rule  15d-14 as of the end of the period
covered by this report. Based on the foregoing  evaluation,  our Chief Executive
Officer and Chief Financial Officer have concluded that our disclosure  controls
and procedures are ineffective in timely  alerting them to material  information
required  to be  included  in  our  periodic  SEC  filings  and to  ensure  that
information  required to be disclosed in our periodic SEC filings is accumulated
and  communicated to our management,  including our Chief Executive  Officer and
Chief  Financial   Officer,   to  allow  timely  decisions   regarding  required
disclosure.

We  have  identified  certain  material  weaknesses  in  internal  control  over
financial reporting relating to a shortage of accounting and reporting personnel
due to limited  financial  resources  and the size of our  Company,  as detailed
below:

1.       The  Company  currently  does  not  have,  but  is in  the  process  of
         developing  formally  documented  accounting  policies and  procedures,
         which  includes  establishing  a  well-defined  process  for  financial
         reporting.  After our  documentation  of our  accounting  policies  and
         procedures  takes place, we plan to focus on performing and documenting
         tests of our internal controls on an ongoing basis throughout the year.

2.       Due to the limited size of our accounting department, we currently lack
         the resources to handle  complex  accounting  transactions.  We believe
         this deficiency could lead to errors in the presentation and disclosure
         of financial information in our annual, quarterly, and other filings.

3.       As is the case with many companies of similar size, we currently have a
         lack of segregation of duties within our accounting  department.  Until
         our  operations  expand  and  additional  cash flow is  generated  from
         operations, a complete segregation of duties will not be possible.

Considering  the nature and extent of our  current  operations  and any risks or
errors in financial reporting under current operations and the fact that we have
been a small  business with limited  employees,  such items caused a weakness in
internal controls involving the areas disclosed above.

Due to financial restrictions at this time, the Company has not taken any action
to resolve such weakness.

There  was no change in our  internal  control  over  financial  reporting  that
occurred during the quarter ended March 31, 2011, that has materially  affected,
or is  reasonably  likely  to  materially  affect,  our  internal  control  over
financial reporting.

                                       20


<PAGE>



                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

                NONE


ITEM 1A.  RISK FACTORS

            Not applicable.

ITEM 2.  UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS

The Company made the following unregistered sales of its securities from January
1, 2011 through March 31, 2011.


<TABLE>
<CAPTION>
<S>                                                                              <C>                 <C>

            DATE OF SALE              TITLE OF SECURITIES   NO. OF SHARES        CONSIDERATION       CLASS OF PURCHASER
            ------------              -------------------   -------------        -------------       ------------------
      January 1, 2011 through
           March 31, 2011                Common Stock          589,002                Cash           Business Associates

</TABLE>

Exemption From Registration Claimed

All of the above sales by the Company of its  unregistered  securities were made
by the Company in reliance upon Rule 506 of Regulation D of the  Securities  Act
of 1933, as amended (the "1933 Act").  All of the  individuals  and/or  entities
that purchased the unregistered securities were primarily existing shareholders,
known  to  the  Company  and  its  management,   through  pre-existing  business
relationships,  as  long  standing  business  associates.  All  purchasers  were
provided  access to all  material  information,  which they  requested,  and all
information  necessary to verify such  information  and were afforded  access to
management of the Company in connection with their purchases.  All purchasers of
the unregistered securities acquired such securities for investment and not with
a view  toward  distribution,  acknowledging  such  intent to the  Company.  All
certificates  or  agreements  representing  such  securities  that  were  issued
contained restrictive legends,  prohibiting further transfer of the certificates
or agreements representing such securities, without such securities either being
first registered or otherwise exempt from  registration in any further resale or
disposition.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

                NONE.

ITEM 4.  REMOVED AND RESERVED



ITEM 5.  OTHER INFORMATION

               NONE.

                                       21

<PAGE>




ITEM 6.  EXHIBITS

Exhibits.  The  following is a complete  list of exhibits  filed as part of this
Form 10-Q.  Exhibit  numbers  correspond  to the numbers in the Exhibit Table of
Item 601 of Regulation S-K.

     Exhibit 31.1  Certification of Chief Executive  Officer pursuant to Section
     302 of the Sarbanes-Oxley Act

     Exhibit 31.2  Certification of Chief Financial  Officer pursuant to Section
     302 of the Sarbanes-Oxley Act

     Exhibit 32.1  Certification  of  Principal  Executive  Officer  pursuant to
     Section 906 of the Sarbanes-Oxley Act

     Exhibit 32.1  Certification  of  Principal  Financial  Officer  pursuant to
     Section 906 of the Sarbanes-Oxley Act

                                       22
<PAGE>




                                   SIGNATURES


     Pursuant to the  requirements  of Section 12 of the Securities and Exchange
Act of 1934,  the  Registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.





                                      GULFSTAR ENERGY CORPORATION
                                            (Registrant)



Dated:  May 16, 2011                 By: /s/Robert McCann
                                         ----------------
                                            Robert McCann, Chief
                                            Executive Officer





Dated:  May  __, 2011                 By: /s/Stephen Warner
                                          -----------------
                                             Stephen Warner, Chief
                                             Financial Officer
                                             (Principal Accounting Officer)

                                       23